What factors does Bhc Franchisor consider when approving a supplier?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Supplier approval will depend on product quality, delivery frequency and reliability, service standards, financial capability, customer relations, concentration of purchases with limited suppliers to obtain better prices and service, and/or a supplier's willingness to pay us or our affiliates for the right to do business with Franchisor's System.
Franchisor may inspect or re-inspect the facilities and products of any approved supplier and revoke Franchisor's approval if the supplier fails to continue to meet Franchisor's criteria and specifications.
(m) As a condition of approval, Franchisee and/or any supplier must reimburse Franchisor for all costs and expenses incurred by us associated with any testing, including travel and lodging expenses incurred where we deem it necessary to visit a supplier's facilities.
(n) Nothing contained in this Disclosure Document or in Franchise Agreement requires Franchisor to approve an inordinate number of suppliers of a given item or approve suppliers, which, in Franchisor's reasonable judgment, would result in higher costs to franchisees or prevent, in Franchisor's sole judgment, our effective and economical supervision of suppliers.
(o) Franchisor and Franchisor's affiliates have the right to receive payments, rebates, and other forms of consideration from suppliers based upon Franchisee's (and other franchisees') purchases of goods, products, and services as described in this section, as well as in connection with any future purchases of any goods, products, and services.
Most of these payments are calculated as an amount based on products sold to Franchisee and Franchisor affiliate-owned Franchised BHC Restaurants.
Franchisor will retain and use such payments as we deem appropriate or as required by the vendor or by manufacturers.
(p) Franchisor may negotiate prices for numerous products for the benefit of the System but not on behalf of individual franchisees. Currently, there is no purchasing or distribution cooperative, but Franchisor reserves the right to create a cooperative and require Franchisee to participate. Franchisor may receive volume discounts for the System which Franchisor will pass through to the franchisees. Beyond these discounts, Franchisor do not provide material benefits to Franchisee because of Franchisee's use of approved suppliers.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, supplier approval depends on several factors. These include product quality, delivery frequency and reliability, service standards, and the supplier's financial capability. Bhc also considers the supplier's customer relations and whether the company concentrates its purchases with a limited number of suppliers to potentially obtain better prices and service.
Another factor in Bhc's supplier approval process is the supplier's willingness to provide payments or other consideration to Bhc or its affiliates for the right to do business with the Bhc system. Bhc may also inspect or re-inspect the facilities and products of any approved supplier and can revoke approval if the supplier fails to continue meeting Bhc's criteria and specifications.
As a condition of approval, Bhc requires that the franchisee and/or the supplier reimburse Bhc for all costs and expenses associated with any testing, including travel and lodging expenses, if Bhc deems it necessary to visit the supplier's facilities. However, Bhc is not required to approve an inordinate number of suppliers for a given item or approve suppliers that, in Bhc's judgment, would result in higher costs to franchisees or prevent effective and economical supervision of suppliers.
Bhc also has the right to receive payments, rebates, and other forms of consideration from suppliers based on franchisees' purchases of goods, products, and services. These payments are often calculated based on products sold to franchisees and Bhc affiliate-owned restaurants. Bhc retains and uses these payments as deemed appropriate or as required by the vendor or manufacturers. Bhc may negotiate prices for numerous products for the benefit of the system but not on behalf of individual franchisees and may receive volume discounts for the system, which Bhc will pass through to the franchisees.